Home Energy Upgrades: Are They Worth the Cost? – ESRI Review & Retrofit Guide

The pursuit of a perfectly energy-efficient home may be a costly distraction, according to a recent review by the Economic and Social Research Institute (ESRI). The report, published last week, suggests that the gap in actual energy consumption between homes with high and low Building Energy Rating (BER) scores is surprisingly small, leading some to question the value of extensive – and expensive – retrofitting projects. This comes at a time when Ireland is significantly behind schedule on its climate action goals for residential heating, with deep retrofits and heat pump installations lagging far behind targets.

The Cost of Comfort: Retrofit Expenses and Limited Returns

The ESRI review highlights the substantial financial burden associated with deep retrofits. The median cost for an apartment ranges from €16,000 to €43,000 for a detached house. Beyond the direct financial outlay, homeowners also face disruption costs – potentially ranging from €9,000 to €24,000 – associated with vacating their homes during the renovation process. Yet, the report finds that a typical G-rated house consumes only 3.7% more energy annually than an A-rated house. This disparity is causing confusion among homeowners and raising questions about the return on investment for energy upgrades. The findings have also reportedly ruffled feathers at the Sustainable Energy Authority of Ireland (SEAI), the agency responsible for distributing hundreds of millions in retrofit grants.

The disconnect between predicted and actual energy savings is a key concern. The ESRI points to research indicating that households often increase their energy consumption when their homes develop into more efficient – a phenomenon known as the “rebound effect.” Homes rated as F or G, for example, actually consume 56% less energy than the theoretical models used in BER assessments predict (around 10,964 kWh per year versus a predicted 24,900 kWh). Similarly, E-rated homes use 39% less energy than predicted, and D-rated homes show a 24% undershoot. This suggests that these less efficient homes are often underheated due to affordability concerns, rather than inherent inefficiency.

BER Ratings: A Question of Prediction vs. Reality

The core issue lies with the methodology behind BER ratings. These ratings are based on predicted energy use, not actual consumption. As the ESRI report notes, average energy consumption remains remarkably consistent across different BER ratings, hovering around 10,800 kWh per year. This suggests that the models used to calculate BER scores don’t accurately reflect real-world behavior. People don’t always behave as the models assume, making different choices about energy use based on circumstances not captured in theoretical calculations. This is particularly evident in highly efficient homes (A and B rated), where actual energy consumption is 40% above predictions – averaging 10,569 kWh per year compared to a predicted 7,549 kWh. These homes, the research suggests, are often overheated.

The Central Statistics Office (CSO) data supports this nuanced picture. According to their Q2 2025 report on Domestic Building Energy Ratings, homes with A and B ratings that use electricity for heating consume just 39 kWh of electricity per square meter, compared to 66 kWh for C-rated dwellings and 58 kWh for F or G-rated homes. Dwelling type also plays a role; detached houses consume 77% more electricity than mid-terrace houses, likely due to their larger size. The CSO report also shows a growing adoption of renewable technologies, with almost a quarter of BER-rated dwellings now featuring solar energy or heat pumps.

Heat Pumps and the Climate Action Plan

Despite the challenges in achieving significant energy savings through retrofits, the Climate Action Plan sets ambitious targets. The plan calls for upgrading 500,000 existing homes to a B2 energy rating and installing 400,000 heat pumps by 2030, with an additional 200,000 heat pumps planned for recent builds. The SEAI emphasizes the benefits of heat pumps, stating they use less than a third of the energy consumed by traditional oil and gas boilers. Heat pumps work by extracting heat from the outside air and compressing it to provide warmth, offering a cleaner alternative to fossil fuels.

Progress on heat pump installation is leisurely but steady. The ESRI review indicates that only 3.5% of the 2030 heat pump target had been met by the end of 2024. However, Ireland is experiencing a relatively high rate of heat pump adoption compared to other European countries, ranking fourth highest with 17 heat pumps sold per 1,000 households in 2024 – almost five times the rate in the UK. Notably, colder European nations like Norway, Finland, and Sweden lead the way in heat pump penetration, demonstrating their effectiveness even in challenging climates. RTÉ’s coverage of the ESRI report details these statistics.

The Value of Incremental Improvements

The question remains: is any energy upgrade worthwhile? The answer, according to the analysis, is generally yes, provided homeowners can afford it and allow sufficient time for the investment to pay off. Even incremental improvements, such as upgrading from an E rating to a C rating, reduce carbon intensity and contribute to overall energy savings. These smaller steps can be seen as building blocks towards the more ambitious B2 standard required to meet national targets. The ESRI review raises a critical point: why shouldn’t all domestic energy upgrades be recognized, in some capacity, towards Ireland’s 2030 goals, even if they don’t immediately achieve the B2 rating? After all, any reduction in energy consumption is a step in the right direction.

Houses account for a quarter of all energy consumption in Ireland, with 80% of that energy used for heating living spaces, and water. Addressing this inefficiency is crucial, given that approximately 30% of heat is lost through poorly insulated roofs and another 30% through walls. The SEAI has grant-aided 100,000 solar panel installations since 2018, with a significant surge in installations in the past year, indicating growing homeowner interest. They supported 47,000 residential energy upgrades in 2022, 58,000 in 2023, and anticipate 73,000 in 2024.

Looking Ahead: Policy Adjustments and Realistic Targets

The ESRI’s findings suggest a necessitate to re-evaluate the current approach to residential decarbonization. The rigid focus on achieving a B2 rating may be discouraging homeowners from undertaking any upgrades at all. A more flexible system that recognizes and incentivizes incremental improvements could accelerate progress. A deeper understanding of homeowner behavior and the factors influencing energy consumption is essential for developing more accurate and effective energy efficiency policies. The debate over the value of energy upgrades is likely to continue, but the ESRI review provides a valuable contribution to the discussion, highlighting the complexities and challenges of achieving Ireland’s climate action goals. The full ESRI review is available on their website.